What is the difference between a credit score and a credit report?

Many people use the term credit score and credit report interchangeably. Although mistaking them may seem harmless, credit scores and credit reports are very different. As stated in the name, your credit score is exactly that, a score. This score is a numerical value that is calculated and used by lenders to determine the risk associated with giving a borrower a loan.

The formula most often used to calculate a credit score takes into account a person’s payment history, amount owed, length of credit history, new credit and type of credit used. A person may receive a different credit score from each lender or reporting agency because the formula used to calculate the credit score will vary. The reason for the variance is because there are different types of credit score scoring models such as FICO, the most commonly used right now, and VantageScore, which both lenders and consumers are starting to use more often.

On the other hand, a credit report contains a person’s credit history. A credit report includes information such as a person’s social security number, current and previous addresses, and employment history. Besides this, a person can find a list of their lines of credit such as credit cards, student loans and mortgages, the date each one was opened, credit limits, and whether their accounts are past due or in good standing. Bankruptcies will also appear on someone’s credit report as well as the names of people that have recently asked to see the person’s credit report.

Knowing your credit score to know where you stand credit-wise, and to be prepared for any outcomes on your credit applications can be helpful. However, it is more important to remember to check your credit report to prevent identity theft and to make sure that all the information on the report is accurate. A person should also check their credit reports from all three credit bureaus to ensure that the information is the same. As stated earlier, a credit score and a credit report are not the same thing, but they are closely related, as the information on a credit report is used in the calculation of a credit score.

Written by Lesly Luna, Financial Wellness Peer Educator, University of Illinois Extension, 2017.

Reviewed by Kathy Sweedler, Consumer Economics Educator, University of Illinois Extension.

What is a good tool to help manage my debt?

According to a 2012 Sallie Mae report, “How America Pays”, 35% of students borrowed education loans to pay for college and, although credit card ownership has decreased recently, 35% of undergraduates have a credit card.

Credit is an important financial tool that students need to learn how to manage wisely. Learn more about how credit card debt can affect you now, as well as in the future by watching the recorded webinar, “Staying on Good Terms: Credit & Debt“.

Credit Management Tool: Use powerpay.org to help you manage your credit, pay down debt and plan your spending. This website was created by Utah State University Extension and WebAIM.org.

To learn even more about how to manage your finances while in college, including what to look for in a financial institution, you can watch another recorded webinar, Cash at College: Spending, Saving & Student Loans.

credit

Cash at College: Spending, Saving & Student Loans (Recorded Webinar)

Cash at College is a must-see webinar for all students headed to college. University of Illinois USFSCO’s Student Money Management Center and University of Illinois Extension have teamed up to offer this educational and engaging webinar for all University of Illinois students. This free webinar features lessons on:

  • how to effectively budget your money while in college
  • the basics of banking
  • options for paying your college tuition
  • understanding credit
  • and how to make the most of your college education

Cash at College offers an important guide to managing your finances, so don’t miss out! Watch it below or on YouTube now!

Test your knowledge. Take the quiz!

Spending badgeThis is a Spending Badge eligible program, so make sure to take the quiz after watching to get credit!

By participating in three Spending Badge eligible events, you could earn a digital badge to enhance your online professional portfolio. Learn more about the Financial Literacy Badges Program by visiting: badges.illinois.edu/usfsco/.

My account is in collections. What should I do?

When your account goes past due and is now in collections, be proactive! These tips can help you cope with and resolve accounts in collections.

OWN IT/ DON’T IGNORE IT. Contact your creditor and tell them what happened. You do not need to divulge personal information; just be truthful and give the basic facts. Most accounts receivable specialists, or “collectors,” will welcome this approach, have worked with many people in similar situations, and probably have options available.

HAVE A PLAN. The collectors don’t know what your resources are, so be prepared to offer some alternatives. Can you pay interest only for a few months or make a partial payment on the past due balance? Ask your representative for advice and what they recommend during times of temporary financial distress.

FOLLOW THROUGH. Do what you have agreed. Do not hesitate to contact the company again if your plans or resources change. Stay in continuous contact until you are able to bring your account up to date.

Written by Mark Austin, Collection Manager, University Student Financial Services & Cashier Operations

Staying on Good Terms: Credit & Debt (Recorded Webinar)

According to a 2012 Sallie Mae report, “How America Pays,” 35% of students borrowed education loans to pay for college and, although credit card ownership has decreased recently, 35% of undergraduates have a credit card. Credit is an important financial tool that students need to learn how to manage wisely. Learn how credit card debt can affect you now as well as in the future through this webinar.

University of Illinois Extension, along with the University of Illinois’ Student Money Management Center, hosted the webinar “Staying on Good Terms: Credit & Debt” on October 21, 2014. The FREE webinar focused on understanding credit, comparing costs of credit, and managing debt effectively. Watch it below!

Borrowing badgeThis is a Borrowing Badge eligible program, so make sure to take the quiz after watching to get credit!

“Staying on Good Terms: Credit & Debt” is part of the Get $avvy: Grow Your Green Stuff webinar series.

 

Written by Andrea Pellegrini, University of Illinois USFSCO Student Money Management Center